• APAC stocks traded mostly higher although gains were capped as participants digested the latest Chinese trade data.
• Chinese trade data showed a continued contraction in both dollar-denominated exports and imports.
• RBA hiked rates by 25bps as expected but provided a slightly less hawkish tone.
• European equity futures are indicative of a contained open with the Euro Stoxx 50 flat after the cash market closed up 0.4% on Monday.
• Price action in the FX space is broadly contained, GBP marginally outperforms, AUD lags post-RBA.
• Looking ahead, highlights include Swiss Unemployment, Speeches from Fed's Powell & ECB's de Cos, Supply from UK, Germany & US.

US TRADE

EQUITIES

• US stocks were subdued and the major indices finished relatively flat after having unwound earlier strength that was initially underpinned by an appetite for big tech which masked broader market weakness, particularly in the small-cap and value stocks, while the intraday pullback coincided with cautiousness ahead of this week's key events in the US beginning with Fed Chair Powell's testimony in Congress.
• SPX +0.07% at 4,048, NDX +0.10% at 12,302, DJIA +0.12% at 33,431, RUT -1.48% at 1,899.
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NOTABLE HEADLINES

• White House official told FBN that President Biden plans to start rolling out his budget push on Tuesday and still plans to officially submit the full budget to Congress on Thursday, March 9th.
• White House said it will have something in the near future on the Fed Vice-Chair nominee.

APAC TRADE

EQUITIES

• APAC stocks traded mostly higher although gains were capped as participants digested the latest Chinese trade data and with cautiousness ahead of Fed Chair Powell's testimony in Congress.
• ASX 200 pared losses after the RBA rate decision where it hiked rates as expected but provided a slightly less hawkish tone in which it noted the Board expects further tightening of monetary policy will be needed which was a subtle tweak from its prior guidance that the Board expects further increases in interest rates will be needed, while it also noted that monthly CPI suggests inflation seems to have peaked.
• Nikkei 225 shrugged off the early weakness to trade marginally higher in the aftermath of the softer-than-expected labour earnings data including the largest decline in real wages since May 2014 which reduces the likelihood of a sooner exit from the BoJ’s ultra-easy policy.
• Hang Seng and Shanghai Comp. were choppy amid mixed Chinese trade data which showed a continued contraction in both dollar-denominated exports and imports, while it was also reported that the White House is considering pushing Congress on dealing with TikTok and that US Senators will announce a bill to comprehensively address the ongoing threat posed by technology from foreign adversaries.
• US equity futures were kept afloat but lacked firm direction; ES +0.2%.
• European equity futures are indicative of a contained open with the Euro Stoxx 50 flat after the cash market closed up 0.4% on Monday.

FX

• DXY was lacklustre with price action confined to a tight range as participants await Fed Chair Powell’s testimony to Congress.
• EUR/USD marginally gained and approached closer to the 1.0700 handle after remarks from ECB’s Holzmann who called for interest rates to be raised by 50bps at each of the next four meetings.
• GBP/USD benefitted from the recent softness in the dollar and eyed resistance around 1.2050.
• USD/JPY remained indecisive and continued to oscillate on both sides of the 136.00 level.
• Antipodeans were mixed with AUD/USD pressured after the RBA rate decision in which the central bank delivered its 10th consecutive rate hike and signalled further tightening, although there was a slight tweak in its guidance and noted that monthly CPI suggested inflation seems to have peaked.
• PBoC set USD/CNY mid-point at 6.9156 vs exp. 6.9159 (prev. 6.8951)

FIXED INCOME

• 10yr UST futures were rangebound after the prior day’s whipsawing in which the initial bull flattening was unwound after hawkish ECB rhetoric and supply pressures ahead of Fed Chair Powell's testimony.
• Bund futures languished near Monday’s lows after the selling pressure triggered by ECB’s Holzmann.
• 10yr JGB futures eked mild gains following the 30yr auction which attracted higher prices.

COMMODITIES

• Crude futures took a breather after yesterday's rebound and with WTI stalling near USD 81/bbl.
• UAE has been taking more cargoes of Russian crude oil in wake of the invasion of Ukraine, according to Reuters citing shipping data and sources.
• US energy envoy Hochstein said Russian oil price caps are working well and that Russian oil continues to flow which is selling at a discount, according to Reuters.
• China's average daily crude oil imports in January-February were at the highest since May last year, according to Reuters calculations based on customs records.
• Spot gold was relatively unchanged amid an uneventful dollar.
• Copper futures were lacklustre as participants digested the latest trade data from China.
• MMG's Las Bambas mine is set to resume copper transportation, according to a minister.

CRYPTO

• Bitcoin traded rangebound with upside limited by resistance around 22,500.

NOTABLE ASIA-PAC HEADLINES

• Chinese President Xi condemned US-led suppression of China, according to state media cited by AFP.
• Chinese Foreign Minister Qin Gang said US perception of China has seriously deviated and that the US thinks China is its main rival. Qin also stated that US so-called competition means containing and suppressing China, while he warned there will be conflict and confrontation if the US does not change its path but also stated that China is committed to promoting healthy and stable development of China-US relations, according to Reuters.
• Taiwan's Defence Minister Chiu said he is not aware of President Tsai meeting with US House Speaker McCarthy but added that if China makes a move, the military's role is to fight. Chiu added that they don't expect it to happen, but will not allow repeated provocations from China.
• US Senators Warner and Thune are to announce a bill on Tuesday that will comprehensively address the ongoing threat posed by technology from foreign adversaries such as TikTok. In relevant news, the German government plans to ban telecom operators from using certain components of Huawei and ZTE in 5G networks.
• RBA hiked rates by 25bps to 3.60%, as expected, while the Board remains resolute in its determination to return inflation to the target and expects further tightening of monetary policy will be needed which was a slight tweak from its previous guidance that the Board expects that further increases in interest rates will be needed, while it also noted that monthly CPI suggests inflation seems to have peaked. Furthermore, the RBA said growth in the Australian economy has slowed and the labour market remains very tight, although conditions have eased a little and that uncertainties mean that there is a range of potential scenarios for the Australian economy.

DATA RECAP

• Chinese Trade Balance (USD)(Feb) 116.88B vs. Exp. 81.8B (Prev. 78.0B)
• Chinese Exports YY (USD)(Feb) -6.8% vs. Exp. -9.4% (Prev. -9.9%)
• Chinese Imports YY (USD)(Feb) -10.2% vs. Exp. -5.5% (Prev. -7.5%)
• Chinese Trade Balance (CNY)(Feb) 810.3B (Prev. 550.1B)
• Chinese Exports YY (CNY)(Feb) 0.9% (Prev. -0.5%)
• Chinese Imports YY (CNY)(Feb) -2.9% (Prev. 2.2%)
• Japanese Labour Cash Earnings YY (Jan) 0.8% vs Exp. 1.9% (Prev. 4.8%, Rev. 4.1%)
• Australian Trade Balance (AUD)(Jan) 11.7B vs. Exp. 12.5B (Prev. 12.2B)
• Australian Exports (Jan) 1% (Prev. -1%)
• Australian Imports (Jan) 5% (Prev. 1%)

GEOPOLITICS

• Chinese Foreign Minister Qin Gang said China-Russia relations are not subjected to interference by third parties and the more turbulent the world is, the more China-Russia relations must advance. Qin stated that China did not create the crisis in Ukraine and has not provided weapons to either side of the conflict, while he added that conflict, sanctions and pressures won't solve the crisis. Furthermore, he said dialogue should begin as soon as possible and what is needed now is calmness and rationality.
• North Korea said US and South Korean military actions have gone too far and leader Kim's sister said North Korea will see it as a declaration of war if the US takes military action against strategic weapon tests, according to KCNA.
• Syrian state media reported Israeli aggression targeting Syria's Aleppo International Airport and a Syrian military source said Israeli aggression put Aleppo International Airport out of service.

EU/UK

• Barclays said UK February consumer spending rose 5.9% Y/Y which was hit by a reduction in non-essential spending and higher food prices, while the sales growth was also affected by comparison to the base as there was a spike in spending in February 2022 after COVID restrictions were lifted.
• ECB’s Stournaras says he is confident that credit rating agencies will upgrade Greece’s bonds within months. Elsewhere, Stournaras would not pre-commit to specific further rate increases amid a backdrop of headline inflation declining; saying, it could increase rather than limit market confusion. (FT)

DATA RECAP

• UK BRC Retail Sales YY (Feb) 4.9% (Prev. 3.9%)
• UK BRC Total Sales Y/Y (Feb) 5.2% (Prev. 4.2%)